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- Galaxy Resources (GXY) has signed an offtake deal with Chengxin Lithium Group’s subsidiary, Sichuan Chengtun Lithium
- Chengxin has agreed to buy at least 60,000 dry metric tonnes per annum of 6 per cent lithium dioxide spodumene concentrate from Galaxy’s Mt Cattlin mine
- The deal will begin from January 2021 and will continue through to 2023 — by which point 180,000 dry metric tonnes will be bought from Mt Cattlin
- Based in WA, Mt Cattlin is a reliable, low-cost producer of high-quality lithium concentrate
- Galaxy has also stated its offtake deal with Yi Chun Yin Li New Energy has been terminated and. the tonnage will be allocated to Chengxin
- Company shares are up a slight 0.31 per cent and are trading for $1.60
Galaxy Resources (GXY) has signed a three-year offtake deal with Chengxin Lithium Group’s subsidiary, Sichuan Chengtun Lithium.
Chengxin has agreed to buy at least 60,000 dry metric tonnes of 6 per cent lithium dioxide spodumene concentrate every year from Mt Cattlin.
The deal will begin in January 2021 and continue through 2022 and 2023, when up to 180,000 dry metric tonnes will be sourced and bought from the Mt Cattlin mine.
Pricing for the spodumene shipments will be on a spot cargo basis for 2021, but this will move to a market-based price for the remaining two years.
“We are pleased to welcome Chengxin as a new major offtake partner, further diversifying and strengthening Galaxy’s customer base to support Mt Cattlin’s operations. Chengxin also has expansion plans underway to increase production
capacity in preparation for the impending lithium demand surge in the medium to long term,” CEO Simon Hay said.
Mt Cattlin is located two kilometres north of Ravensthorpe in Western Australia. Since production restarted in 2016, Mt Cattlin has been a reliable, low-cost producer of high-quality lithium concentrate.
As of December 2019, the mine has a mineral resource of 14.6 million tonnes at 1.29 per cent lithium dioxide and an ore reserve of 8.2 million tonnes at 1.29 per cent lithium dioxide.
Galaxy has also announced its offtake agreement with Yi Chun Yin Li New Energy has been terminated and the tonnage will be allocated to Chengxin.
The latest offtake supplements Galaxy’s long term spodumene concentrate offtake agreements with Yahua International Investment and Development. Under this deal, GXY supplies 120,000 dry metric tonnes of 6 per cent lithium dioxide spodumene concentrate every year from Mt Cattlin up to December 31, 2025.
It will also supplement the existing offtake deal with Meiwa Corporation for 55,000 dry metric tonnes per annum of 5.7 per cent spodumene concentrate up to December 31 2022.
Galaxy is negotiating with Meiwa to convert its offtake to a spot call off arrangement.
Company shares are up a slight 0.31 per cent and are trading for $1.60 at 10:21 am AEDT.
